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It’s hard (impossible?) to argue that Google has done most things right. Don’t you wish you were among the first few hundred employees they had in the beginning years and had the stock options they received? We don’t know the stats, but you’ve got to figure that the Silicon Valley has produced more millionaires per square mile than anywhere in the universe, well maybe with the exception of Wall Street, but isn’t that about the same thing?

The fundamental obsession that made Google successful and keeps them successful is analyzing data. They use it for every decision they make. It even has a big function in the HR department called People Analytics. Recently they used the analytics within HR to makes its incentives and recognition programs more meaningful. Unlike many companies that plan employee recognition programs, Google shuns benchmarking and best practices and prefers to do their own data gathering and analytics instead. In addition they examine external research to assure they are on solid footing and make sure they don’t duplicate work that has already been done.

According to Kathryn Dekas, people analytics manager at Google…

“Focusing on the users is a big tenet for Google. Within HR are users are our Googlers and we want to provide them with the most unique experience.”

The new system that they created to recognize and reward employees was done in house and has been, or will shortly be rolled out to all employees. Interesting to note that that this system was done in house and was not typical points based delivery system. This allowed them to control the award delivery and give their people what they wanted, based of course on the analytics!

We would encourage any company thinking of implementing or redesigning their employee award efforts to mine some of their own data, and not just purchase some off the shelf points based system that may or may not provide the type of motivation that your people really want.

Gillette has been at the heart of men’s grooming for over 100 years. Over 600 million men around the world trust their skin to Gillette razors. That’s a lot of blades!! Gillette has been widely credited with developing the razor and blades business model by virtually giving the razors away for little or no cost just so folks would begin using them. When hooked on the razor, Gillette had a life time of blade buyers. That same promotional strategy has been used by many companies over the years with varying results.

Some incentive and recognition award companies have used this marketing concept since the introduction of electronic points based award programs. They created their own point’s platforms and then either give them away at low prices or for nothing in order to secure the awards portion of the business. The award companies then have total control over which awards they use in their programs and are extremely reluctant to add awards that will distort their profit, even if the client or participants want them. These traditional awards are almost always priced substantially above retail. The award companies go through inordinate gyrations to spin reasons why the award mix they offer is the best and only mix that will produce the results. In this case, they will only let you buy their blades.

In the last few weeks we’ve consulted with several companies about electronic points based incentive and reward programs. When we present our recommendations, we always use a discussion of the “razor and blades business model” to explain the differences in offerings. On the one hand you can purchase the platform from a true software company who has developed it and sells it as a piece of software, including the myriad number of additions and changes necessary to keep it state of the art at all times. On the other hand you can purchase the platform that has been created for the sole purpose of controlling the award mix to secure their profitability. With the rapid changes in the digital world these award companies are reluctant to keep their platforms as up to date due to the expense. Often, clients will receive a platform built ten years ago with little change. That’s kind of unheard of in the digital world. There’s something new coming out all the time.

When purchasing the award platform as software independent of the awards thee major client expense is to customize the basic platform for launch, typically a onetime charge. The ongoing cost is normally a lessor annual license expense. As award point issuance is ongoing over the life of the program and can last for several years, the client can be paying high award margins for these awards for years to come with no way of changing the award mix without changing the software platform itself.

Unfortunately for many, new awards such as gift cards, experiential life style awards, air ticketing, travel and event ticketing are not offered in these award malls. And if they are, the extra cost of rebuilding the award mall and additional fees added to these awards to maintain profitability can be prohibitive. So, when an award company presents you with their razor, make sure that you will be happy being a lifetime buyer of their awards

Are all incentive programs successful? No! In fact there are some studies that show that as many as 66% don’t produce results or in fact have negative results. Why?

An incentive program is not a panacea for all employee performance issues. It is not a substitute for all the right things you know to change employee behavior. It is not a substitute for poor leadership or unfair compensation. But when used in the right context, it will definitely highlight all the other programs that you implement and can motivate your employees to improve performance.

Like the proverbial story of making the horse drink at the trough, you can avail your employees of all the programs necessary to make them successful, but with some of them you will not be able to make them “drink.”

An incentive program is nothing more than a tool to motivate your employees to want to take that first sip. Once they do, the vast majority will want to continue the experience for the simple reason that there is something in it for them.

Incentive program can fail for a variety of reasons. Following are some of the more typical things that will negatively affect them: Read the rest of this entry »

For a client to know what kind of system is best suited to their needs, they must spend some time prior to investigating potential suppliers, and attempt to understand the fundamental types of systems that exist, and some of the basic features. Web-based incentive and reward systems range from simple online “redemption engines” used mainly to showcase and distribute awards to winning participants, to complete turnkey enterprise solutions that will manage workplace performance throughout the organization. At first glance, and depending on the proficiency of the salesperson you’re asking, most systems will appear very similar. But looks in this arena are very deceiving. While similarities exist between all systems, there can also be vast differences. Choosing which one is best suited to your needs will depend on several factors. In the beginning of your search, ask yourself these questions about the system you think you need. The answers to these alone could immediately eliminate several potential suppliers: